Cost model: Reinventing retail assets

Primark Birmingham shutterstock_1366677212

In the face of tough market conditions, landlords, developers and owner/occupier retailers are looking at new business models

01 / Economic context

Retailers and retail asset owners are suffering under the strain of business-rate liabilities, the increasing prominence of internet shopping, falling footfall, strong demand for discounting and rising operational costs. In addition, consumer trends are changing to reportedly favour brands offering individualism and easy access. Last year was one of the toughest periods for retailers/retail asset owners, with a net loss of 7,550 units. 

An analysis of 650 town centres by The Local Data Company revealed that, increasingly, retail units are undergoing structural changes, with units being converted into residential or office use, split into smaller units or even demolished as landlords seek to reduce their exposure to a difficult market. 

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